On April 12, TAAHP signed on to the letter sent to Congress by NCHSA and signed by 82 organizations representing state and local government officials and Housing Credit industry participants. The letter urged congressional leaders to amend the underlying statute of the Coronavirus State and Local Fiscal Recovery Fund (SLFRF) to facilitate its use with the Low-Income Housing Tax Credit (Housing Credit) program so that states and local governments may use these funds to build and preserve desperately needed affordable rental housing.
In January 2022, the U.S. Department of the Treasury issued a final rule about the State and Local Fiscal Recovery Fund (SLFRF), created by the American Rescue Plan Act of 2021 (ARPA). Per that rule, SLFRF dollars must be obligated by December 31, 2024 and expended by December 31, 2026. Because funds must be expended by 2026, states cannot continue to make LIHTC payments for the duration of previously-negotiated contracts; nor can these funds be given immediately as grants without reducing the cost basis for developers and disincentivizing construction.
The hope had been that Congress would include such language in the FY 2022 appropriation omnibus that passed last month. While the final F.Y. 2022 spending legislation did not include that provision, NCSHA and partner organizations such as TAAHP continue to pursue the fix.
In a strong showing of bipartisan support, Representatives Alma Adams (D-NC-12), David Rouzer (R-NC-07), and Carolyn Maloney (D-NY-12), introduced the LIHTC Financing Enabling Long-term Investment in Neighborhood Excellence Act (LIFELINE Act), H.R. 7078, on March 17. The bill proposes a legislative fix to allow SLFRF to be used to provide long-term loans to Housing Credit developments. In addition, the legislation aims to ease gaps in financing due to rising construction costs, price increases, supply chain issues, and workforce difficulties related to the COVID-19 pandemic. Companion legislation is expected to be released soon by Senator Patrick Leahy (D-VT) in the Senate.
When introducing the legislation, Congresswoman Adams said, “I’m proud to lead a bipartisan team of legislators in the House and the Senate to introduce the LIFELINE Act, legislation that will protect and preserve affordable housing developments that rely upon low-income housing tax credits (LIHTC). Over 20 states have declared their intention to use money from the American Rescue Plan to ensure that the pipeline of affordable housing units will remain robust. Our legislation removes the statutory barriers in place so that cities, counties, and states can use their State and Local Fiscal Recovery Fund dollars to support affordable housing developments.” Adams is a member of the House Financial Services Committee, the committee of jurisdiction for housing.